Reducing DSO with Agentic AI: The Future of Faster Receivables

For years, finance teams have tried everything to reduce Days Sales Outstanding (DSO)—better dunning strategies, stricter credit policies, more headcount in collections. Traditionally, reducing DSO has meant doing more—more reminders, more collectors, more spreadsheets or more tools. Despite their best efforts, high-performing AR teams often find themselves constrained by the limitations of this traditional approach.

This is where agentic AI starts to shift the game. This isn’t just another automation buzzword. Agentic AI isn’t about taking a manual process and turning it into a bot. It’s about embedding intelligence inside the workflow. It’s AI that doesn’t just follow rules; it identifies patterns, makes decisions, and actually nudges the process in the right direction. Proactively.

And that’s where the real DSO reduction starts to happen. In this blog, we’ll explore how smarter, agentic AI solutions are helping finance teams move the needle on DSO in a sustainable and scalable way.

1. Spot Risk Before It Turns into Aging

Traditionally, credit and collections teams rely on historical data. Payment trends, customer segments, aging buckets—those are the go-to signals. But by the time something shows up in a report, the invoice might already be 30+ days late.

Agentic AI helps AR teams navigate this challenge by monitoring  customer behavior in real-time. For instance, if a customer starts delaying payments slightly or making unusual deductions, a collaborative AR automation Software , powered by agentic AI can catch that early. Not only catch it—but reprioritize that account in your collections strategy, adjust outreach tone or cadence, and notify your team. All before it hits your radar.

That kind of early detection? It’s one of the fastest paths to lowering DSO.

2. Make Collections Smarter, Not Just Faster

Speed is important, but what’s better is precision. Lots of teams send out automated dunning letters or reminders on a schedule. The problem is that it doesn’t always match what’s actually going on with the customer.

With agentic AI, collections become more adaptive. AI agents can analyze how a customer responds to past outreach, which communication channels work best, and what kind of language or tone gets results. Then it adjusts the strategy per account. High-priority accounts get personal follow-ups. Lower-risk ones get gentle nudges. And everything in between runs on real behavior analysis, not just templates.

It’s not about sending more emails. It’s about sending the right one, at the right time. And when you get that right, payments tend to land faster.

3. Automate the Pain Out of Cash Application

While often overlooked, cash application plays a critical role in the overall efficiency and effectiveness of the accounts receivable process. If your team is tired of trying to match remittance info from emails, PDFs, and customer portals to open invoices… you’re already behind.

Agentic AI streamlines this with data extraction that actually understands context. It doesn’t just pull numbers—it links them, cleans them, and applies them.
By eliminating the need for manual line-item reviews or corrections, agentic AI significantly reduces the time spent resolving mismatches. This streamlined process enables faster and more accurate cash posting, which in turn prevents unnecessary follow-ups on invoices that have already been paid. This, as a result, improves both customer experience and internal efficiency.

It’s a simple loop: a better cash app means less confusion and lower DSO.

4. Get Ahead of Disputes—Before They Derail Your Invoices

Disputes are DSO killers. They derail invoices for weeks—sometimes months—while teams chase documents, go back and forth with sales, and try to figure out what even happened.

What agentic AI brings here is not just speed, but context in dispute management. It can classify disputes based on historical data, auto-pull relevant backup (like POs, delivery proofs, contracts), and even estimate the most likely outcome. That way, your team can respond faster—and smarter.

Additionally, it also helps AR teams to see patterns. If a customer keeps disputing the same charge, the system picks that up and flags it for review. This shift from reactive issue resolution to proactive prevention helps reduce future disputes and improves the overall collections process. 

5. Keep Credit Risk Dynamic (Because It Actually Is)

Credit risk isn’t static. The market shifts. Customer behavior shifts. But too often, credit limits stay frozen based on outdated reviews.

Agentic AI can monitor both internal payment behavior and external credit events to constantly reevaluate a customer’s risk level. If something changes—a delayed payment here, a missed filing there—the system can suggest a credit limit update before that account becomes a problem.

This kind of dynamic risk management helps you stay in front of slow payers, rather than scrambling to manage them after the damage is done.

How HighRadius Helps You Crush Your DSO Goals—And Stay Ahead of Competitors

HighRadius’ automation solutions goes beyond traditional AR automation tools. The Order to Cash Automation software, powered by an agentic AI framework, represents a fundamental shift—from reactive processes to proactive strategies, and from task-oriented execution to outcome-driven performance.

The entire suite is built around the idea of connected intelligence—the coordination between AI agents that learn from behavior, adapt in real time, and execute with purpose. Every piece of the process—credit, collections, cash application, disputes—is enhanced by AI that’s actually aware of what’s happening across the system.

Let’s say a customer’s payment behavior starts shifting—they’re paying a little slower, or deducting more often than usual. The software doesn’t just log that info; its AI agents use it to reprioritize collections, flag potential credit risk, and alert your team before a problem actually lands. Just a system that acts like a second brain for your AR team.

Some key things our accounts receivable software  brings to the table:

• Autonomous Collections Agents: It prioritizes accounts daily and adjusts dunning strategies based on real-time customer behavior.
  
• Cash Application Agentic Framework: It matches payments with invoices using remittance data from emails, portals, even attachments—without needing constant corrections.
  
• Dispute Management Agent: It reduces turnaround time by auto-classifying claims, pulling backup docs, and even predicting likely outcomes.
  
• Credit Risk Agent: It tracks both internal payment history and external credit events to recommend dynamic credit limits—updated as fast as the market moves.

So, if you’re re-evaluating your receivables process and wondering if there’s a smarter, more sustainable way forward—you’re not alone. Leading finance teams at companies like Wesco, Hersheys, Danone, and Pfizer have already begun leveraging our agentic AI to streamline operations and accelerate cash flow. 

In many of those cases, the AI is quietly working in the background—prioritizing tasks, flagging risks, and helping AR teams stay ahead without adding headcount.